tv Nightly Business Report PBS December 8, 2011 1:00am-1:30am PST
this meeting? >> i don't look for a major comprehensive package. something that everything gets solved and it's all wrap up with a nice holiday ribbon on it. the issues are just too complex, and the parties are, it's just too contentious, i do think they will reach a more modest compromise where they are seen as moving in the direction of an ultimate resolution. and that ultimate resolution will have several pieces to it. one of them will be a closer fiscal integration, one of them will probably be greater ecb involvement in the purchases of peripheral government bonds, more austerity and commitment to austerity by the peripheral countries, a number of things like that, but i just don't see that we can get all that done in the next couple days. >> susie: when you talk about this fiscal integration, that means you've got to get 17 countries on board about agreeing to have budget discipline. now, do you think they can get a deal on that? or is that a deal breaker? >> it's going to be tough. we see it in the u.s., how hard it is to get a deal done, and that's one country. 17 countries makes it just
incredibly difficult. but i do think that they recognize the gravity of the problem. that if they don't ultimately come to some sort of a deal here, on all of these issues, that the monetary union will not be viable, and the alternative, collapse of the union, disorderly debt defaults and the potential ramifications that could have on the financial markets not just in europe and the economy, not just in europe, but around the world, i think will be sufficient to concentrate minds ultimately to get a deal done. i just don't know that they can get all of those things done in just the next couple days. >> susie: and those are the very issues that worry investors , and actually worry everybody around the world. so do you think that as if crisis drags on in europe that it could cause a recession in the u.s. in 2012? >> i don't. but that's assuming that we don't get a full-fledged blowup of the crisis. in other words that the policy makers in europe are do enough to sort of ring fence the problem, prevent it from turning into what i talked about, the disorderly debt
defaults, the clams of the union, the fell fledged banking and financial crisis. if they can avoid that, and i do think they will, then i don't think it would cause a recession in the u.s.. probably be a mild recession in europe, some knock on effects to the u.s. but manageable. >> susie: so you know that treasury secretary geithner is had europe and he has talking to the policy makers there. what role, if any, should the u.s. have in coming up with a solution for this crisis? >> unfortunately, i think other than offering advice and sort of encouragement, i don't see that the u.s. can really play a major role here. there are things that can be done at the margins, the federal reserve, for example, expanded out currency swap lines with the ecb to make dollar liquidity available to european banks. that's helpful. but ultimately the resolution of this crisis is going to be european in nature. so the u.s. has got to sort of
unfortunately sit on the sidelines and hope for the best. >> susie: all right, josh thanks so much for coming on, a lot of interesting information tonight. >> thanks for having me. >> susie: and we've been speaking with josh fineman, chief global economist at d. b. advisors. >> tom: still ahead, martha stewart goes through j. c. penney as the big retailer takes a big stake the her business. >> susie: jon korz sign will be in the hot seat tomorrow on capitol hill, the disgraced c.e.o. will face tough questions from lawmakers about what exactly led to the lapse of the brokerage firm. members of the house agricultural committee won't be the only ones interested in corzine's answers. thousands of former customers want to know what happened to their money, which disappeared following m. f. global's bankruptcy. diane estabrook reports. >> reporter: in sunny ft.
lauderdale, florida, jennifer is facing a gloomy holiday season. she still hasn't gotten back $10,000 she had in an account at bankrupt m. f. global. the 35-year-old single mom was counting on the cash to launch a new business. >> i can't start my business at all, because i have absolutely no capital. i cannot pay bills that i have currently. my childrens, my twins' birthday is do it 9, we can't have a party now. christmas is canceled. >> reporter: behind the headlines of the m. f. global scandal are thousands of customers like her, more than a billion dollars of their money went missing when the futures broker filed for chap ter 11 in october. they want answers from former squo jon corzine and hey hope to get them tomorrow when he appears in washington. >> one of my favorite movies is the one with "where's the
money". >> reporter: he runs the trading firm and helped form the coalition. the group represents about 100 former m. f. global customers including roe who connected through social media. they've pooled about 80,000 dollars for legal fees and have gotten before the bankruptcy trustee and the judge hearing the m. f. global case. >> we weren't being represented at all because people were saying you're going to have to share in some kind of loss. why? we have segregated funds, so our interest was not being represented, it was you're just like a creditor, you're going to have to share in the distribution of loss. no, we're not and we shouldn't be. >> reporter: roe says the coalition has been instrumental in getting back some customer money but not all of it. retiree arlene and her husband got a check in the mail a couple days ago, while she's somewhat relieved she's now skeptical about an industry she trusted. >> i don't know who we can trust, even a mattress is dangerous, it could catch on fire. i really don't know how to protect our money 100%.
>> reporter: the coalition's work won't be over even if all the customers get their money back. he says the group plans to lobby the industry for better safe guards to make sure that what happened at m. f. global doesn't happen again. diane estabrook, "nightly business report", chicago. >> tom: one person with a lot of questions for former m. f. global squo jon corzine is senator pat roberts, the ranking member on the u.s. senate agriculture committee. darren gersh spoke with him today and asked about the impact global is having an trm farmers. >> think of the farmer that was driving back to kansas from colorado and heard about this on the news, all of a sudden found out that $30,000 of his assets were frozen. he was getting prepared to buy seed, fertilizer, was talking to a local realtor in regards to some land he might want to
purchase or rent. that just stops it just like that. it's going to have an impact on crops, this is going to have an impact on our food prices, it is pretty broad across all the farm country. and i'm hearing more about this than i am what's going to happen on the farm bill. >> reporter: we did talk would one investor who wanted to ask the senator where's the money. so is that the question you're going to ask if you get a chance to talk to mr. corzine, we can say what happened to the money and where is it, i think there are a whole series of questions, one leading to another, to ask our former colleague. and by the way, i want to emphasize that if he's our official former colleague that makes him no different than any other witness. >> reporter: if we can fine customer, if the money from m. f. global is lost, should the government step in and help to make these people whole? >> well, that's still a question. let's find the money. and let's see working with the
trustee, let's take that first step first. and then if there's any consideration along those lines later, why, we'll take it up. >> reporter: one of the things that's come up about this is whether or not there should be some kind of insurance fund for customers accounts who trade in commodities. is that something that should be considered? >> i think we better wait and see before we try to overregulate, and get ourselves into worse trouble. we don't want to overregulate. we don't want to take too much regulation. but at the same time, we have to safe guard everybody's interest. number one, let's find out what the facts are, let's find out where the money is, let's try to make people whole, then we can consider whatever regulation is appropriate. >> reporter: but we have insurance accounts for banks, we have customer insurance accounts for securities, why not for commodities? >> it's a fair on serb vation. let me point out what the, they just made a ruling, as to whether or not a futures
>> tom: it was another day for muted stock moves as well as commodity moves. let's get you updated with tonight's market focus. we saw u.s. stocks spending a second straight session marking time, end of the day mix with the european leaders gathering to solve that dealt crisis, hopefully at least. the market started out weak at the beginning of the session here today. really hitting this low spot right within the first hour of trading, equities were able to catch a bid in the last 90 minutes or so of the session. catching a little bit of wind here before dropping and losing some of that steam on into the closing bell, ending with a 2.5 gain for the s&p. it was financial stocks leading the way for the broad market and the dow jones industrial average. j. p. morgan, bank of america and insurance giant travelers were the top three dow gainers, each were stronger by morning 1.5%. j. p. morgan leading the dow with a 2% gain, the bank says it has the ability to spend $950 million on stock buybacks
under a previously approved plan by the federal reserve. morgan stanley was the strongest financial stock in the s&p 500 with a 4.6% gain today. heavier volume with this buying interest. as optimism has grown about a burr even -- a european fix, shares have ralied to their highest since halloween. the big board -- the german buyer ted said it remains committed, but not at any price. a big jump for martha stewart living, jumping to 25 fold. j. c. penney bought almost a 17% stake in the company as it looks for way to turn around its department store sales. erika miller will have more on this deal in a moment. jcp paid 3.50 a share for its stake, share price rallying well above that.
the stock saw a more muted reaction, gaining a fraction. struggling retailer talbot's shot up almost 70% after receiving a buyout offer, valuing the company at 3 per share, the stock closing out today at 2.65. mcclatchy predicted to bounce back. u.s.a. today owner began net ralied, thanks oh its own upbeat forecast. some broad based selling, especially in softs and grains. cocoa futures finished at a three-year low. >> susie: as tom mentioned, martha stewart living was a big winner on wall street stot and j. c. penney bought a huge stake in the company. the retailer hopes the deal with martha stewart living with be a good thing, a
tracking new customers to the store. erika miller reports. >> reporter: this is what j. c. penney looks like now, not much different from other department stores. and that's the problem. to try to differentiate itself, j. c. penney plans to install mini martha stewart shops with specially trained salespeople. there will also be a joint website. analyst says it's a step in the right direction for the department store. >> if you shop j. c. penney stores, they skew a little bit older, a little bit tired, to be honest, and and this is an efforts to spice them up and to give it a brab image that's a little more junker -- more younger, more invigorated. >> reporter: this is the first big move by ron johnson, j. c. penney's new c.e.o.. his goal is to give consumers a reason to come into j. c. penney stores, instead of slopping online. if that strategy seems similar to apple's retail store, it's
no coincidence. johnson was the man behind apple's bricks and mortar concept. a store within a store is not an entirely new direction for j. c. penney. for five years, j. c. penney has set up mini sephora makeup shops as part of a broader strategy to beef up its brands. but the fact remains that it's struggling. recently it posted out first quarterly loss in two years. and it blamed poor black friday sales on a later open than its rivals. analysts say it's tough to compete against macy's, which karntly offers a martha stewart line. >> macy's is targeting their merchandise bring yably. they've got more exclusives than anyone else, martha stewart and a host of others so, they're executing on all cylinders and that's why they're winning. >> reporter: martha stewart shops won't be in j. c. penney until 2013, but the announcement is well timed, after all what store doesn't want extra publicity in the final weeks before christmas.
>> tom: here's what we're watching for tomorrow. we're due to see quarterly results from both ends of the retail spectrum, costco and harry winston diamond. we'll also see weekly jobless claims and october wholesale numbers. plus jon corzine will head to capitol hill to testify before a house committee. >> susie: federal regulators charge bp with a new set of oil spill violations, today's charges builds on earlier allegations that bp, halliburton and trans-ocean together ran afoul of 15 off shore regulations in drilling, designing and cementing the failed well last year. the companies already face up to 46 million in fines for those earlier citations. bp has 60 days to appeal the latest violations. the company said it plans to do just that. >> tom: the obama administration says too big banks are not doing enough to
help american homeowners avoid foreclosure. the treasury department says j. p. morgan chase and bank of america are doing a poor job of helping people lower mortgage payments as part of the government's own foreclosure prevention program. the treasury department plans to withhold payments from that program to both banks for a third straight quarter.
>> tom: with the markets waiting and watching for european leaders to come up with a big solution to their debt troubles, it's likely any fix will not end the volatility. so says tonight's street critique guest, he expects the big swing to continue. michael farback with us, author of the new book, entitled the arrogant cycle. always great to see you, happy holidays. >> thank you, tom, great to see you, happy holidays everyone. >> tom: plenty of anticipation ahead of friday for europe. you just stay on the sidelines until then? >> i don't think you stay on the sidelines, tom, but anticipation seems to be ruling the day. we all seem to be hanging on every ultimate rans from different governments and central banks. not necessarily a good thing. we had a coordinated effort from world central banks. last week, to save the european banking system. now it came through, markets went up. that was a really good thing. but that we had to have a coordinated effort from central banks around the world, that's not such a good thing and it speaks to the level of the problem.
so i think if you own some pretty good solid companies you'll get through. but to try and play this seems to be to be very dangerous game. >> tom: so noted. you've had an affinity for the multi-national blue chips, back on october 26 the last time we had you on you liked pepsi, it's up about 5% since then, johnson and johnson is flat. cellular phone quality com up 5.5%, all three performing pretty well. >> i like them all and of course we buy a portfolio of stocks with similar characteristics and different industries. but if we have strong balance sheets, low dealt, high returns on equity and a decent dividend and earnings in different countries and different currencys around the world, we think that will leave you in good stead, particularly in uncertain economic times. >> tom: tim sent us this e-mail.
is that attractive? >> no question of 6% is attractive, the question of is, is it too attractive. while i like at&t and i like some of the higher dividend queelding -- yielding stocks, have you to be careful. usually the while ter yield the higher the risk. a lot of these telcos are leveraged, so you want to look for companies with more solid balance sheets, they don't perform as well when interest rates start to rise so, a more diversified portfolio including some at&t and other dividend paying stocks like pepsi co, quality come, johnson and johnson would make me feel a little better. >> tom: looking for diversity. >> slumt. >> tom: do you own the four we mentioned? >> i own all four, my family owns them and we then them in the fund that my firm manages. >> tom: thank you for joining us. michael farr, author of the are oh kbant cycle. >> susie: finally tonight the numbers are in and it looks like small business saturday was a success.
103 million americans responded to the call to shop small during this year's kickoff to the holiday shopping season. american express led the campaign and says the day definitely surpassed expectations. over half a million independently owned merchants participated. and tom, amex hopes to keep the smop small -- shop small movement going year round. >> tom: this is only the second year that they've done this effort. that is "nightly business report" this wednesday night, december 7. we want to remind you this is the time of year your public television station seeks your support. >> susie: absolutely, support that makes programs like "nightly business report" possible. >> tom: thank you for joining us, and don't forget to support your local public television station. i'm tom hudson , have a beautiful evening, you too susie. >> susie: the same to you, tom. good night everyone. i'm susie gharib. we hope to see all of you again tomorrow night.